Supplemental Retirement Agreement between NBT Bancorp Inc., NBT Bank, National Association and Daryl R. Forsythe as amended and restated Effective January 1, 2005

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Exhibit 10.11

Supplemental Retirement Agreement between NBT Bancorp Inc., NBT Bank, National Association and Daryl R. Forsythe as amended and restated effective January 1, 2005.

 

 

Supplemental Retirement Agreement

(as amended and restated effective January 1 2005)

(Revised)

This sets forth the terms of an agreement for the payment of supplemental retirement income (“Agreement”) made as of January 1, 1995 (and as revised on April 28, 1998, January 1, 2000, January 1, 2001, August 2, 2003 and again as of January 1, 2005) between (i) NBT BANCORP INC., a Delaware corporation and a registered bank holding company, and NBT BANK, NATIONAL ASSOCIATION, a national banking association chartered under the laws of the United States, both having offices located at Norwich, New York (collectively, the “Bank”), and (ii) DARYL R. FORSYTHE, an individual residing at 21 Ridgeland Road, Norwich, New York 13815, and who is a member of a select group of management or highly compensated employees within the meaning of section 201(2) of the Employee Retirement Income Security Act of 1974, as amended (“Forsythe”).

1. Purpose of the Agreement. The purpose of this Agreement is to provide Forsythe a supplemental retirement benefit in accordance with the terms of this Agreement

2. Definitions. For purposes of this Agreement, the following words shall have the meaning indicated:

(a) Actuarial Equivalent. “Actuarial Equivalent” shall have the same meaning the term “Actuarial Equivalent” has under Section 2.03 of Appendix A to the Qualified Plan (i.e., the NBT BANCORP INC. Defined Benefit Pension Plan, as amended and restated as of October 1, 1989, including amendments adopted through August 31, 1998) using the following actuarial assumptions:

(i) Mortality: “Applicable Mortality Rate” as such term is defined in Section 2.03c of said Appendix A to the Qualified Plan

(ii) Interest Rate: “Applicable Interest Rate” as such term is defined in Section 2.09b of said Appendix A to the Qualified Plan

(b) Beneficiary. “Beneficiary” shall mean such living person or living persons designated by Forsythe in accordance with subsection 5(a) herein to receive benefits under this Agreement after his death, or his personal or legal representative, all as herein described and provided. Except as provided in subsection 6(b) herein, if no Beneficiary is designated by Forsythe or if no Beneficiary survives Forsythe, the Beneficiary shall be Forsythe’s estate.

(c) Cause. “Cause” shall mean Forsythe’s:

(i) willful or gross misconduct with respect to the business and affairs of the Bank, or with respect to any of its affiliates for which Forsythe is assigned material responsibilities or duties;

(ii) conviction of a felony (after the earlier of the expiration of any applicable appeal period without perfection of an appeal by Forsythe or the denial of any appeal as to which no further appeal or review is available to Forsythe) whether or not committed in the course of his employment by the Bank;

(iii) willful neglect, failure, or refusal to carry out his duties under the Employment Agreement between NBT Bancorp Inc. and Forsythe dated as of August 2, 2003 (and revised as of January 1. 2005) (the “Employment Agreement”) in a reasonable manner (other than any such failure resulting from disability or death or from termination by Forsythe for Good Reason, as defined in the Employment Agreement) after a written demand for substantial performance is delivered to Forsythe that specifically identifies the manner in which the Bank believes that Forsythe has not substantially performed his duties and he has not resumed substantial performance of his duties on a continuous basis within thirty days of receiving such demand; or

(iv) breach of any representation or warranty in section 6(a) of the Employment Agreement or of any agreement contained in section 1, 4, 5, or 6(b) of the Employment Agreement, which breach is material and adverse to the Bank or any of its affiliates for which Forsythe is assigned material responsibilities or duties.

(d) Change of Control. “Change of Control” shall mean a Change in Control as such term is defined in the Change of Control Agreement between Forsythe and the Bank dated January 1, 2000 (a revision of the April 28, 1998 and February 21, 1995 agreements).

(e) Code. “Code” shall mean the Internal Revenue Code of 1986, as amended.

(f) Determination Date. “Determination Date” shall mean the date of Forsythe’s retirement as a Full-Time Employee.

(g) Final Average Compensation. “Final Average Compensation” shall have the same meaning as the term “Final Average Compensation” has under Section 2.27 of Appendix A to the Qualified Plan (i.e., the NBT BANCORP INC. Defined Benefit Pension Plan, as amended and restated as of October 1, 1989, including amendments adopted through August 31, 1998), except that in determining the amount of Compensation (as defined in Section 2.14 of said Appendix A to the Qualified Plan) to be used in calculating Final Average Compensation under Section 2.27 of said Appendix A to the Qualified Plan, Compensation shall not be subject to the compensation limitation of section 401(a)(17) of the Code.

(h) Full-Time Employee. “Full-Time Employee” shall mean an employee of the Bank who works not less than 1,000 hours in a calendar year.

(i) Other Retirement Benefits. “Other Retirement Benefits” shall mean the sum of:

(i) The annual benefit payable to Forsythe from the Qualified Plan, plus

(ii) The annual benefit that could be provided by (A) Bank contributions (other than elective deferrals) made on Forsythe’s behalf under the NBT Bancorp Inc. 401(k) and Employee Stock Ownership Plan, and (B) actual earnings on contributions in (A), if such contributions and earnings were converted to a benefit payable at age 65 in the same form as the benefit paid under this Agreement, using the same actuarial assumptions as are provided under subsection 2(a).

The amount of Other Retirement Benefits shall be determined by an actuary selected by the Bank, with such determination to be made without reduction for payment of benefits prior to any stated “normal retirement date” and without regard to whether Forsythe is receiving payment of such benefits on the Determination Date.

(j) Present Value. “Present Value” shall mean the present value of a benefit determined on the basis of the following actuarial assumptions:

(i) Mortality: “Applicable Mortality Rate” as such term is defined in Section 2.03c of Appendix A to the Qualified Plan (i.e., the NBT BANCORP INC. Defined Benefit Pension Plan, as amended and restated as of October 1, 1989, including amendments adopted through August 31, 1998).

(ii) Interest Rate: “Applicable Interest Rate” as such term is defined in Section 2.09b of said Appendix A to the Qualified Plan.

(k) Qualified Plan. “Qualified Plan” shall mean the NBT BANCORP INC. Defined Benefit Pension Plan, as amended and restated effective as of January 1, 2000.

(l) Social Security Benefit. “Social Security Benefit” shall mean Forsythe’s actual social security benefit at his Social Security Retirement Age.

(i) Social Security Retirement Age. “Social Security Retirement Age” shall have the same meaning the term “Social Security Retirement Age” has under Section 2.58 of Appendix A to the Qualified Plan (i.e., the NBT BANCORP INC. Defined Benefit Pension Plan, as amended and restated as of October 1, 1989, including amendments adopted through August 31, 1998).

(m) Year of Service. “Year of Service” shall mean a calendar year in which Forsythe completes not less than 1,000 hours of service.

3. Amount of Supplemental Retirement Benefit

(a) Supplemental Retirement Benefit.

(i) Amount Payable as a Cash Benefit. Upon Forsythe’s retirement as a Full-Time Employee, the Bank shall pay Forsythe a Supplemental Retirement Benefit the amount (as apportioned in paragraphs A and B below and section 4 herein) of which shall be calculated in accordance with the benefit formula set forth in Appendix A attached to this Agreement.

A. Accrued Benefit as of December 31, 2004. Starting from January 1, 1995, Forsythe has continuously accrued a supplemental cash retirement benefit under pervious versions of the Agreement through, and including, December 31, 2004 (the “Pre-2005 Accrued Cash Benefit”). It is the Bank’s intention that the Pre-2005 Accrued Cash Benefit shall be deemed a “grandfathered” benefit with respect to the application of section 409A of the Code. The Pre-2005 Accrued Cash Benefit shall be based on a ratio of a numerator of 10, over a denominator of 13.6667 (equal to Forsythe’s total years of Full-Time Employee service with the Bank commencing January 1995, assuming he continues in service until age 65).

B. Post-2004 Accrual of Benefits. Starting from January 1, 2005, through and including Forsythe’s retirement from Full-Time Employee service with the Bank, Forsythe shall continue to accrue a supplemental cash retirement benefit under the Agreement (the “Post-2004 Accrued Cash Benefit”). The Post-2004 Accrued Cash Benefit shall be subject to the application of section 409A of the Code. The Post-2004 Accrued Cash Benefit shall be based on a ratio of a numerator equal to Forsythe’s years of Full-Time Employee service with the Bank commencing from January 1995 through Forsythe’s retirement, over a denominator of 13.6667 (equal to Forsythe’s total years of Full-Time Employee service with the Bank commencing January 1995, assuming he continues in service until age 65), less the Accrued Benefit as of December 31, 2004.

(ii) Continued Medical Benefits. Upon Forsythe’s retirement, the Bank will continue in force the same level of medical benefits (including but not limited to medical, dental and vision care) that were in effect at the time of Executive’s retirement at the same cost sharing as in effect at the time of Executive’s retirement, for Executive and for his spouse (if alive) until their deaths. Any subsequent adjustments (including levels and cost) made to the Bank’s benefit plans shall effect Forsythe is the same manner as they would had he been employed at the same level as of the date of his retirement.

4. Time of Payment.

Except as provided in section 6 (payment on death), the Bank shall commence payment of the Pre-2005 Accrued Cash Benefit as of the month immediately following the month of Forsythe’s retirement as a Full-Time Employee; provided, however, no payment of the Post-2004 Accrued Cash Benefit shall commence earlier than the first day of the seventh (7^th) month following Forsythe’s “separation from service” as that phrase is defined for purposes of section 409A of the Code. Forsythe’s continued medical benefits shall continue in force uninterrupted as stated in paragraph 3(a)(ii) herein.

5. Form of Payment.

(a) The Accrued Cash Benefits described in sections 3 and 4 herein shall be paid as a straight life annuity, payable in monthly installments, for Forsythe’s life; provided, however, that if Forsythe has no surviving spouse and dies before having received 60 monthly payments, such monthly payments shall be continued to his Beneficiary until the total number of monthly payments to Forsythe and his Beneficiary equal 60, whereupon all payments shall cease and the Bank’s obligation under this Agreement shall be deemed to have been fully discharged. If Forsythe and his Beneficiary shall die before having received a total of 60 monthly payments, an amount equal to the Actuarial Equivalent of the balance of such monthly payments shall be paid in a single sum to the estate of the survivor of Forsythe and his Beneficiary. If Supplemental Retirement Benefits are payable in the form described in this subsection 5(a), Forsythe shall designate in writing, as his Beneficiary, any person or persons, primarily, contingently or successively, to whom the Bank shall pay benefits following Forsythe’s death if Forsythe’s death occurs before 60 monthly payments have been made.

(b) Notwithstanding the form of payment described in subsection 5(a), if Forsythe is married on the date payment of the Accrued Cash Benefit commences, the benefit shall be paid as a 50% joint and survivor annuity with Forsythe’s spouse as the Beneficiary. The 50% joint and survivor annuity shall be the Actuarial Equivalent of the benefit described in subsection 5(a). If the Accrued Cash Benefit is payable pursuant to this subsection 5(b), but Forsythe’s spouse fails to survive him, no payments will be made pursuant to this Agreement following Forsythe’s death.

© Notwithstanding the foregoing provisions of this section 5, the Bank, in its sole discretion, may accelerate the payment of all or any portion of the Pre-2005 Accrued Cash Benefit at any time. Any Pre-2005 Accrued Cash Benefit payment accelerated in accordance with this subsection 5(c) shall be the Actuarial Equivalent of the payment being accelerated. Except as provided in subsection 6(b) herein, there shall be no acceleration of the Post-2004 Accrued Cash Benefit.

6. Payments upon Forsythe’s Death.

(a) Except as provided in subsections 6(b) and (c) and Appendix A section 4, if Forsythe shall die before his retirement from the Bank, no payment shall be due his spouse or estate under this Agreement

(b) If Forsythe’s death shall occur after his retirement from the Bank, but before payment of any Pre-2005 Accrued Cash Benefit has commenced, Forsythe’s surviving spouse shall be paid as a straight annuity, 50 percent of the total (both Pre-2005 and Post-2004) Accrued Cash Benefit for her life commencing within 30 days following Forsythe’s death, calculated in accordance with subsection 3(a). Such payments shall be made in monthly installments, subject to the right of the Bank to accelerate payment at any time, notwithstanding subsection 5(c). However, if Forsythe’s spouse fails to survive him, the Bank shall pay to Forsythe’s estate a lump sum benefit equal to 50 percent of the Present Value of Forsythe’s total Accrued Cash Benefit.

(c) Except as otherwise provided in subsection 6(b), no payments shall be made under this Agreement if Forsythe dies before payment of any Accrued Cash Benefit begins and his spouse fails to survive him.

(d) If Forsythe’s death shall occur after payment of an Accrued Cash Benefit has commenced, Forsythe surviving spouse or other Beneficiaries shall receive payments under this Agreement to the extent provided in section 5.

7. Forfeiture for Cause. Notwithstanding any other provision of this Agreement, if Forsythe’s employment with the Bank is terminated for Cause, Forsythe and his spouse or other Beneficiaries shall forfeit all rights to any payment or other benefit under this Agreement.

8. Powers. The Bank shall have such powers as may be necessary to discharge its duties under this Agreement, including the power to interpret and construe this Agreement and to determine all questions regarding employment, disability status, service, earnings, income and such factual matters as birth and marital status. The Bank’s determinations hereunder shall he conclusive and binding upon the parties hereto and all other persons having or claiming an interest under this Agreement. The Bank shall have no power to add to, subtract from, or modify any of the terms of this Agreement. The Bank’s determinations hereunder shall be entitled to deference upon review by any court, agency or other entity empowered to review its decisions, and shall not be overturned or set aside by any court, agency or other entity unless found to be arbitrary, capricious or contrary to law.

9. Claims Procedure.

(a) Any claim for benefits by Forsythe, his spouse or other Beneficiaries shall be made in writing to the Bank. In this section, Forsythe and his Beneficiaries are referred to as “claimants.”

(b) If the Bank denies a claim in whole or in part, it shall send the claimant a written notice of the denial within 90 days after the date it receives a claim, unless it needs additional time to make its decision. In that case, the Bank may authorize an extension of an additional 90 days if it notifies the claimant of the extension within the initial 90-day period. The extension notice shall state the reasons for the extension and the expected decision date.

(c) A denial notice shall contain:

(i) The specific reason or reasons for the denial of the claim;

(ii) Specific reference to pertinent Agreement provisions upon which the denial is based;

(iii) A description of any additional material or information necessary to perfect the claim, with an explanation of why the material or information is necessary; and

(iv) An explanation of the review procedures provided below.

(d) Within 60 days after the claimant receives a denial notice, he or she may file a request for review with the Bank. Any such request must be made in writing.

(e) A claimant who timely requests review shall have the right to review pertinent documents, to submit additional information or written comments, and to be represented.

(f) The Bank shall send the claimant a written decision on any request for review within 60 days after the date it receives a request for review, unless an extension of time is needed, due to special circumstances. In that case, the Bank may authorize an extension of an additional 60 days, provided it notifies the claimant of the extension within the initial 60-day period.

(g) The review decision shall contain:

(i) The specific reason or reasons for the decision; and

(ii) Specific reference to the pertinent Agreement provisions upon which the decision is based.

(h) If the Bank does not send the claimant a review decision within the applicable lime period, the claim shall be deemed denied on review.

(i) The denial notice or, in the case of’ a timely review, the review decision (including a deemed denial under subsection 9(h)) shall be the Bank’s final decision.

10. Assignment. Neither Forsythe nor his spouse or other Beneficiaries may transfer his, her or their right to payments to which he, she or they are entitled under this Agreement. Except insofar as may otherwise he required by law, any Supplemental Retirement Benefit payable under this Agreement shall not be subject in any manner to alienation by anticipation, sale, transfer, assignment, pledge or encumbrance, nor subject to the debts, contracts, or liabilities of Forsythe or his spouse or other Beneficiaries.

11. Continued Employment. This Agreement shall not be construed as conferring on Forsythe a right to continued employment with the Bank.

12. Funding.

(a) The Supplemental Retirement Benefit at all times shall he entirely unfunded, and no provision shall at any time be made with respect to segregating any assets of the Bank for payments of any benefits hereunder, except that in the event of a Change of Control, the Bank, within five (5) days of such Change of Control, shall fund a grantor trust within the meaning of section 671 of the Code with an amount sufficient to cover all potential liabilities under this Agreement.

(b) Neither Forsythe nor his spouse or other Beneficiaries shall have any interest in any particular assets of the Bank by reason of the right to receive a benefit under this Agreement. Forsythe and his spouse or other Beneficiaries shall have only the rights of general unsecured creditors of the Bank with respect to ally rights under this Agreement.

(c) Nothing contained in this Agreement shall constitute a guarantee by the Bank or any entity or person that tile assets of the Bank will he sufficient to pay any benefit hereunder.

13. Withholding. Any payment made pursuant to this Agreement shall be reduced by federal and state income, FICA or other employee payroll, withholding or other similar taxes the Bank may be required to withhold. In addition, as the Accrued Cash Benefit accrues during Forsythe’s employment with the Bank, the Bank may withhold from Forsythe’s regular compensation from the Bank any FICA or other employee payroll, withholding or other similar taxes the Bank may be required to withhold.

14. Successors and Assigns. This Agreement shall be binding upon, and shall inure to the benefit of, the successors and assigns of the Bank.

15. Applicable Laws. This Agreement shall he construed and administered in accordance with the laws of the State of New York, except to the extent preempted by federal law.

16. Amendment. This Agreement may not be amended, modified or otherwise altered except by written instrument executed by both parties.

17. Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties, and supersedes all prior agreements or understanding (whether oral or written) between the parties relating to deferred compensation and/or supplemental retirement income.

The parties hereby execute this Agreement as follows:

 

By: /S/ Michael J. Chewens

 

Dated: December 19, 2005

Its: Secretary

 

 

By: /S/ Michael J. Chewens

 

Dated: December 19, 2005

Its: Secretary

 

Dated: December 19, 2005

 

/S/ Daryl R. Forsythe

 

1. Supplemental Retirement Benefit Formula for Purposes of Agreement Section 3.

a. Amount Payable on and after Age 65. If Forsythe shall remain employed by the Bank until reaching his 65th birthday, serving as a Full-Time Employee until such date, and subject to the other terms and conditions of this Agreement, the Bank shall pay Forsythe an annual “Supplemental Retirement Benefit” determined as follows:

i. On and after Age 65 but before Social Security Retirement Age. Forsythe shall be entitled to a Supplemental Retirement Benefit on and after his 65th birthday but before his Social Security Retirement Age in an amount equal to the excess of (1) 75 percent of Forsythe’s Final Average Compensation, over (2) Forsythe’s Other Retirement Benefits, determined as of the Determination Date and calculated in accordance with Agreement subsection 2(i).

ii. On and after Social Security Retirement Age. Forsythe shall be entitled to a Supplemental Retirement Benefit on and after his Social Security Retirement Age in an amount equal to the excess of (1) 75 percent of Forsythe’s Final Average Compensation, over (2) the sum of (aa) Forsythe’s Other Retirement Benefits, determined as of the Determination Date and calculated in accordance with Agreement subsection 2(i), plus (bb) Forsythe’s Social Security Benefit.

b. Amount Payable on and after Age 56 but before Age 60. If Forsythe shall remain employed by the Bank until reaching his 56th birthday, serving as a Full-Time Employee until such date and he continues to serve as a Full-Time Employee until the date of his retirement, and he retires then or thereafter but before reaching his 60th birthday, and subject to the other terms and conditions of the Agreement, the Bank shall pay Forsythe on his 60th birthday, pursuant to Appendix section 3, or to his spouse or other Beneficiary, pursuant and subject to Appendix section 4 if he has died before his 60th birthday, a reduced early Supplemental Retirement Benefit calculated in accordance with Appendix section 2 and the following schedule;

i. If the date of Forsythe’s retirement shall be on or after his 56th birthday but before his 57th birthday, the Bank shall pay Forsythe 20% of the reduced early Supplemental Retirement Benefit so calculated;

ii. If the date of Forsythe’s retirement shall be on or after his 57th birthday but before his 58th birthday, the Bank shall pay Forsythe 40% of the reduced early Supplemental Retirement Benefit so calculated;

iii. If the date of Forsythe’s retirement shall be on or after his 58th birthday but before his 59th birthday, the Bank shall pay Forsythe 60% of the reduced early Supplemental Retirement Benefit so calculated; and

iv. if the date of Forsythe’s retirement shall be on or after his 59th birthday but before his 60th birthday, the Bank shall pay Forsythe 80% of the reduced early Supplemental Retirement Benefit so calculated.

c. Amount Payable on and after Age 60 but before Age 65. If Forsythe shall remain employed by the Bank until reaching his 60th birthday, serving as a Full-Time Employee until such date and he continues to serve as a Full-Time Employee until the date of his retirement, and he retires then or thereafter but before reaching his 65th birthday, and subject to the other terms and conditions of this Agreement, the Bank shall pay Forsythe a reduced early Supplemental Retirement Benefit calculated in accordance with Appendix section 2 except that at age 62 the amount shall not be less than an amount equal to the excess of (A) 65% of Forsythe’s Final Average Compensation over (B) Forsythe’s Other Retirement Benefits determined as of the Determination Date and calculated in accordance with Agreement section 2(i).

2. Early Supplemental Retirement Benefit. If the Bank commences payment of a reduced early Supplemental Retirement Benefit before Forsythe reaches age 65, the amount paid shall equal the product of (i) the Supplemental Retirement Benefit, as calculated under Appendix section 1(a)(i), times (ii) a fraction, the numerator of which shall be the number of complete months of Forsythe’s employment with the Bank after January 1, 1995, and the denominator of which is 164 (the number of complete months of employment Forsythe would have had after January 1, 1995 if he remained employed by the Bank until the first day of the month following his 65th birthday).

3. Payment. Subject only to the section 409A of the Code rules regarding distribution of any portion of the Post-2004 Accrued Cash Benefit, the Bank shall commence payment of a reduced early Supplemental Retirement Benefit on the first day of the month following Forsythe’s Determination Date in connection with early retirement after reaching age 60 and prior to the date of his 65^th birthday; provided that, if Forsythe shall retire prior to his 60^th birthday as permitted in this Agreement, the Bank shall commence payment of the reduced early Supplemental Retirement Benefit on the first day of the month following Forsythe’s 60^th birthday.

4. Death. If Forsythe dies before his 60^th birthday and on or after his 56^th birthday, before payment of any Supplemental Retirement Benefit has commenced, Forsythe’s surviving spouse shall be paid, in monthly installments, as a straight life annuity, 50 percent of such Supplemental Retirement Benefit for her life commencing within 30 days following Forsythe’s death, calculated in accordance with Appendix subsection 1(b) and, if such death occurs while Forsythe is employed by the Bank, as if he had retired on the day before his death, subject to the right of the Bank to accelerate such payments as provided in Agreement subsection 5(c). However, if Forsythe’s spouse fails to survive him, the Bank shall pay to Forsythe’s estate a lump sum benefit equal to 50 percent of the Present Value of Forsythe’s Supplemental Retirement Benefit, calculated as provided in the preceding sentence.